Banks’ Green Targets Risk Misleading – ShareAction  

Europe’s largest 20 banks’ green finance targets and reporting has a widespread lack of transparency that leaves them open to allegations of greenwashing, non-profit ShareAction has warned. The research undertaken by ShareAction’s banks team found that just four lenders – Barclays, BNP Paribas, ING, and Intesa Sanpaolo – publish partial information on how they have calculated some of their green finance targets. Further, the research found that banks frequently included products in their targets which do not lead to greater funding of green activities such as sustainable technology, technology development or renewable power generation. BBVA, for example, are meeting their green finance target by collecting deposits, while Standard Chartered are meeting theirs by advising clients on mergers and acquisitions. A key discovery of the investigation uncovered that just 35% of banks measured the real impact of their financing such as the level of renewable energy capacity installed through funding. The research also highlights how banks reported even less on whether their green financing was for new assets or already existing projects. In one example uncovered by the research, HSBC reported 77% of its 2022 green bond allocation was to already existing projects. Xavier Lerin, Senior Research Manager at ShareAction, said: “Banks widely promote their green credentials to their customers and shareholders. However, there is a structural lack of transparency on what their green finance activities achieve. It remains unclear from what the banks themselves are reporting and in the targets they are setting whether they are actually providing the finance required to transition our economy and mitigate against the most damaging consequences of climate change.” The report calls on policymakers and standard-setting bodies to establish standards that tackle greenwashing and ensure banks are properly measuring the impact of their financing. 

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